Impac Returns to Profit, Plans Mortgage Originations Comeback in 2010

Mortgage lender and servicing outsourcing firm Impac Mortgage Holdings(IMPM) reported annual earnings of $10.8m, or $0.44 per share, in 2009, a return to profitability after losing $44.7m, or $7.34 per share, in 2008.
While Impac no longer operates as a real estate investment trust (REIT), the company said it plans to re-enter the mortgage origination space in 2010, focusing exclusively on loans that are eligible for sale to the US Department of Housing and Urban Development (HUD) and the government-sponsored enterprises. This renewed operation will complement Impac’s new fee-based loss mitigation, real estate owned (REO) surveillance services, real estate brokerage and title and escrow business units.
The current economic environment continues to adversely affect the credit performance of Impac’s long-term mortgage portfolio, the company said. Economic weakness, marked by high unemployment, weak housing prices and overall economic weakness lead to an increase in loan defaults and loan loss severity, Impac said.
Impac said $17.5m of its $42.6m in non-interest income was attributed to fees collected from loan modifications. Non-interest expenses totaled $55.6m an increase of $26.5m from 2008, primarily related to increases in personnel and costs associated with the start of Impac’s new mortgage and real estate fee-based business activities.
Last year, Impac purchased 4.4m shares of its preferred stock for $1.3m, plus an additional $7.4m in preferred stock dividend.
Write toAustin Kilgore.
The author held no relevant investments.

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